3 key questions
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| | | The complexity organizations face today—geopolitical dynamics, economic uncertainty, disruptive technologies—is equally arduous for boards. Additionally, boards must manage a host of priorities in a limited time frame, balance short-term performance with long-term shareholder value, and address critical gaps in industry expertise, all of which can leave them on the back foot. They cannot afford to be. As the authors of this 2013 classic argue, a company’s strategy is only as good as the board that helps create it.
To build more effective boards—ones that go beyond merely reviewing and approving strategy and work in lockstep with management—board members and senior managers should ask themselves three questions. First, does the board understand the industry’s dynamics well enough? Board members should invest time in learning about the forces shaping the industry and how they create value. Second, has there been sufficient board–management debate before deciding on a strategy? Smarter boards can help push senior managers to craft smarter strategies. Third, have the board and management rigorously explored all strategic paths? Management shouldn’t just present a fully polished strategy proposal to the board; both parties need to roll up their sleeves and pressure-test the options together.
Boards are a crucial part of a company’s strategy development. For more on how senior managers can get the most out of them, read our 2013 McKinsey Quarterly classic “Tapping the strategic potential of boards.”
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| Read our latest thinking on this classic topic
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| | | | | Nearly nine in ten companies now use AI in at least one business function, but boards are not keeping pace, with many lacking expertise in the technology, research shows. Boards that are fluent in AI are better equipped to help their companies navigate the challenges of adopting frontier technology—and create real value from it. Read our latest insights on the topic from McKinsey’s Aamer Baig, Ashka Dave, Celia Huber, and Hrishika Vuppala. | | Recalibrate the board’s role  | | | |
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| | | —Edited by Drew Holzfeind, senior editor, Chicago
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